SINGLE RESOLUTION MECHANISM

The Financial Stability Authority operates as part of the Single Resolution Mechanism of EU Member States participating in the Banking Union. The Mechanism consists of the Single Resolution Board, the Single Resolution Fund and national resolution authorities. The Single Resolution Mechanism enables effective resolution of banks and investment firms should these encounter serious financial difficulties despite common banking supervision. The purpose is to ensure an orderly resolution of banks with minimal costs to taxpayers and the economy.

SINGLE RESOLUTION BOARD

The Single Resolution Board (SRB) is the resolution authority for the Banking Union. The Board is a key element of Banking Union and the Single Resolution Mechanism. It is responsible for the resolution planning and decisions on a resolution action in relation banking groups under direct ECB supervision or with crossborder operations. The SRB is an independent EU agency located in Brussels. It is also responsible for the Single Resolution Fund (SRF).

The Single Resolution Board works in close cooperation with national resolution authorities, the European Commission and the ECB. The SRB strives to achieve convergence and harmonisation in order to ensure as uniform activity and decision-making as possible on the part of Banking Union resolution authorities and to secure equal treatment for all banks operating in the Banking Union, irrespective of the Member State they are located in.

The Single Resolution Board convenes in two sessions: executive and plenary. Those attending the executive session are the Board's Chair and Vice-Chair (without voting rights if the Chair is present) and four permanent Board members. The Board, in its executive session, prepares and, to the extent possible, adopts all resolution decisions. When the decisions concern the resolution of an institution in a Member State, a representative of the resolution authority of that Member State will be invited to participate in the decision-making process.

Membership of the plenary session comprises, in addition to the members of the executive session, the representatives of the resolution authorities of all Member States participating in Banking Union. The Board, in its plenary session, deals with matters other than those related to resolution and decides on the use of the financial resources of the Single Resolution Fund in the event of a proposition to use the Fund in excess of the threshold of EUR 5 billion.

SINGLE RESOLUTION FUND

The Single Resolution Fund (SRF) will commence operations at the beginning of 2016. Credit institutions’ contributions will be transferred from the national Resolution Fund to the Single Resolution Fund, the target level of which is an amount equivalent to 1% of total covered deposits of the Banking Union, i.e. around EUR 55 billion by current estimates. The target level of the SRF is scheduled to be reached by the end of 2023.

The SRF will initially consist of national compartments, which will gradually be merged over a transitional period of eight years.

The Single Resolution Fund (SRF) will commence operations at the beginning of 2016. Credit institutions’ contributions will be transferred from the national Resolution Fund to the Single Resolution Fund, the target level of which is an amount equivalent to 1% of total covered deposits of the Banking Union, i.e. around EUR 55 billion by current estimates. The target level of the SRF is scheduled to be reached by the end of 2023.

The SRF will initially consist of national compartments, which will gradually be merged over a transitional period of eight years.